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Why are the billionaires always laughing?

Because they know the corporate media will never call bullshit on their bullshit.

U.S. Treasury Secretary Janet Yellen appears at the G7 summit

U.S. Treasury Secretary Janet Yellen meets with Eurogroup President Paschal Donohoe on the second day of the G7 Finance Ministers meeting in London on June 5, 2021. (Photo: Alberto Pezzali/Pool/AFP via Getty Images)

Oxfam Denounces OECD Global Tax Deal as 'Skewed-to-the-Rich and Completely Unfair'

"This deal is instead no more than a G7 money grab. Rich countries are forcing developing countries to choose between a raw deal or no deal."

Jake Johnson

The humanitarian group Oxfam International warned Thursday that a global tax reform framework pushed by the United States and newly endorsed by 130 countries would let corporate behemoths such as Amazon off the hook and further entrench deep inequities between rich and developing nations.

"Those who shamelessly rigged the global tax system to their benefit over a century ago have again ring-fenced the game for themselves."
—Gabriela Bucher, Oxfam International

Hailed as an "important step" by U.S. President Joe Biden, the deal includes a 15% global minimum tax rate on multinational corporations and new rules ostensibly aimed at closing loopholes that tech giants have long exploited to dodge taxes. On Thursday, the Organization for Economic Cooperation and Development (OECD) announced that 130 countries—including every G20 nation—have backed the international tax blueprint.

While some tax equity campaigners applauded the agreement as a good start, Oxfam International executive director Gabriela Bucher slammed the deal as "no more than a G7 money grab," referring to the seven wealthy nations that have helped spearhead the talks.

"Rich countries are forcing developing countries to choose between a raw deal or no deal," said Bucher. "It is just another form of economic colonialism. This is not an 'historic' deal―it is history repeating itself. Those who shamelessly rigged the global tax system to their benefit over a century ago have again ring-fenced the game for themselves."

Bucher echoed tax justice campaigners' earlier warnings that the deal pushed by G7 nations would allow Amazon to keep dodging its obligations because one of the framework's pillars would apply only to "profit exceeding a 10% margin for the largest and most profitable multinational enterprises."

As The Guardian reported earlier this month, Amazon's "profit margin in 2020 was only 6.3%. It runs its online retail business at very low profit margins, partly because it reinvests heavily, and partly to gain market share."

Furthermore, Bucher argued, "the G7 and E.U. will pocket more than two-thirds of new cash that a global minimum corporate tax rate of 15% will yield."

"The world's poorest countries will recover less than 3%―despite being home to over a third of the world's population. If you're a nurse in Mexico, a market vendor in Thailand, or a small business crippled by Covid-19 in Kenya, then this tax deal isn't for you," said Bucher. "The deal the OECD wants is skewed-to-the-rich and completely unfair. It is bad news for tax havens, but will fail to levy funds developing countries desperately need to save lives and propel sustainable economic recovery from Covid-19."

A global minimum tax is a top priority of U.S. Treasury Secretary Janet Yellen, who has called the proposal essential to ending a decades-long "race to the bottom" that has resulted in a sharp decline in corporate tax rates across the globe.

As economist Gabriel Zucman explained earlier this month, a 15% global minimum tax rate would "not mean that all countries must increase their corporate tax rate to 15%."

"It means that multinational profits will be subject to a 15% minimum effective rate," said Zucman, an expert on tax havens and a proponent of a global minimum tax. "Take a German multinational that books income in Ireland, taxed at an effective rate of 5%. Germany will now collect an extra 10% tax to arrive at a rate of 15%—same for profits booked by German multinationals in Bermuda, Singapore, etc. Other nations will proceed similarly."

While backed by more than 130 countries, the global tax deal remains a long way from enactment, given that national legislatures—including the narrowly Democratic U.S. Congress—must ultimately approve laws implementing the new digital tax rules for tech giants and the minimum corporate tax, which critics say should be higher than the proposed 15%.

"A global tax rate of 25% would raise nearly $17 billion more per year for the world’s poorest countries than a 15% rate―enough to vaccinate 80 percent of their population," said Bucher. "The 15% rate agreed by the G7 and endorsed today will do little if nothing to end harmful tax competition. It is already being seen by some in Australia and Denmark as an excuse to lower domestic corporate tax rates, risking a new race to the bottom."

Alex Cobham, chief executive of the London-based Tax Justice Network, agreed with Bucher's critique, telling the New York Times that the emerging tax overhaul "gives little to lower-income countries and leaves much of the incentive for profit shifting intact."

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